The role of corporate environmental sustainability and top management characteristics under corporate law in firm performance: Evidence from Saudi Arabia listed companies

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Abstract

This study investigates how corporate environmental sustainability (CSR) and top management (TM) characteristics respond to Saudi corporate law to determine their impact on the performance of firms listed on the Saudi Stock Exchange. It relies on the perspectives of corporate governance and legal compliance to explore whether TM qualities, including team size, female representation, accounting and financial expertise, and sustainability practices, influence corporate performance in a regulated environment. The analysis proceeds on the premise of panel data of 131 listed companies between 2015 and 2021, which provides 917 firm-years of data retrieved through the Bloomberg database. Baseline relationships were estimated using ordinary least squares (OLS) regression, and two-stage least squares (2SLS) were used to handle possible endogeneity. Heteroscedasticity and serial correlation were corrected using the feasible generalized least squares (FGLS) regression. The results indicate that the composition and expertise of TM play a vital role in the firm’s performance. Reduced female representation is linked to poor performance, and accounting and finance expertise has a positive and significant impact. The governance and legal appropriateness of sustainability-based leadership are also evident in the fact that CSR practices improve firm performance.

Keywords: Corporate Law, Corporate Governance, Environmental Sustainability, Top Management Characteristics, Gender Diversity, Firm Performance, Saudi Arabia

Authors’ individual contribution: Conceptualization — E.M.A.-M. and N.H.A.A.; Formal Analysis — N.H.A.A.; Resources — M.M.E., R.A.E.M.H., and H.M.M; Visualization — S.M.A. and M.I.A.E.; Writing — Original Draft — E.M.A.-M.; Writing — Review & Editing — M.M.E., R.A.E.M.H., H.M.M., S.M.A., and M.I.A.E.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: Q56, G34, L25

Received: 10.10.2025
Revised: 16.02.2026; 26.02.2026; 07.04.2026
Accepted: 15.04.2026
Published online: 17.04.2026

How to cite this paper: Al-Matari, E. M., Alnor, N. H.A., Elshaabany, M. M., Hamza, R. A. E. M., Misbah, H. M., Alshdaifat, S. M., & Eisa, M. I. A. (2026). The role of corporate environmental sustainability and top management characteristics under corporate law in firm performance: Evidence from Saudi Arabia listed companies. Corporate Law & Governance Review, 8(2), 129–140. https://doi.org/10.22495/clgrv8i2p12